- Chief Compliance Officer and VP of Legal Affairs, Arrow Electronics
By 
Aaron Nicodemus2023-02-08T21:13:00
The Securities and Exchange Commission’s (SEC) annual examination priorities report is used by broker-dealers, investment firms, and other registered entities to understand what issues or topics will be the focus of the Division of Examinations in the coming year.
The 2023 report, released Tuesday, laid out areas under the microscope this year, including compliance with the agency’s Marketing Rule and Regulation Best Interest (Reg BI). Each policy is expected to receive greater scrutiny since taking full effect in 2022 and 2020, respectively.
The SEC tends to evaluate compliance with new rules with a lighter, “good-faith-efforts” view in the first year, said Carlo di Florio, global advisory leader at ACA Group and a former SEC and Financial Industry Regulatory Authority regulator. In Years 2 and 3, however, “the training wheels come off, and the examiners dig into the substantive provisions and details” of a rule, he said. That will be the case with the Marketing Rule and Reg BI in 2023, he said.
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Nearly three-quarters of compliance professionals at investment firms have made testing for off-channel and electronic communications surveillance a top priority in mock exams, according to a new poll, with more than half calling it the “hottest” topic of discussion.
A risk alert from the Securities and Exchange Commission listed top reasons why a registered broker-dealer might be the subject of an examination.
SEC examiners will be asking tough questions of registered firms regarding how they handle risks related to operational security, interact with financial technology companies and crypto assets, and the maturity of their anti-money laundering programs.
Financial institutions holding Russian sovereign assets that have not reported them to the Treasury Department’s Office of Foreign Assets Control are now required to do so by Aug. 2.
Compliance officers should take note of proposed laws in the U.K. with the newly elected Labor government setting the legislative agenda in the King’s Speech last week, promising consultations on enhanced employee rights and a higher minimum wage.
Four federal banking regulators have joined the Treasury Department’s Financial Crimes Enforcement Network in issuing a notice of proposed rulemaking that would require financial institutions to conduct more thorough risk assessments on their anti-money laundering/countering the financing of terrorism programs.
